As more 3-bedroom homes are bought by investors and converted into rentals, young families are quietly disappearing from our cities.
This isn’t just about affordability - it’s about ownership. The data shows that families aren’t looking to raise their kids in rental houses, even if they’re large enough. They want stability. They want the long-term security that comes with owning a home. And when they can’t find that, they leave.
This trend isn’t anecdotal. New research from Mike Moffatt and the Missing Middle Initiative provides compelling data from the 2016 and 2021 Censuses in Ontario. It finds a strong correlation between the growth of owner-occupied 3+ bedroom homes and the population growth of children under five. In contrast, areas where more of these homes were converted to rentals saw declines in the number of young children.
To put it plainly: families don’t want to start or grow a family in a rental unit. They want to own the homes they live in. And when that path is closed off - when they’re forced to compete with investors for the same low-rise family housing - they move elsewhere.
That’s one of the reasons I’ve been vocal about the role investors play in our housing market - particularly in the low-rise segment. These homes were designed to house families, not portfolios. When they become investment assets, they stop serving the people they were built for.
And yet, for years, we’ve heard the same tired excuses from government and housing experts:
"It's just a supply issue."
"Blame restrictive zoning."
"Population growth is the problem."
Everything under the sun, except the most obvious point: families aren’t losing access to housing because it doesn’t exist - they’re losing access because they’re being outbid.
It’s not enough to simply build more homes. We need housing policy that recognizes this reality. That means prioritizing owner-occupied homes and disincentivizing investor ownership - especially in the part of the market meant for families.
If we want families to stay in our cities, we need to make it possible - and realistic - for them to put down roots.
John Pasalis is President of Realosophy Realty. A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been utilized by the Bank of Canada, the Canadian Mortgage and Housing Corporation (CMHC) and the International Monetary Fund (IMF).
Have questions about your own moves in the Toronto area as a buyer, seller, investor or renter? Book a no-obligation consult with John and his team at a Realosophy here: https://www.movesmartly.com/meetjohn
June 26, 2025
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